1. No (See below).
2. Not Exactly (See below).
3. Yes eventually.
With an International Driving Permit (IDP), a tourist is able to use his/her original license in a overseas country or place who has agreed to accept IDP, which includes Hong Kong.
However, since your boss is not a tourist, but a temporary resident. In that case, Transport Department will not recognize the use of IDP as well as his original license. He will have to apply for a license through this:
http://www.td.gov.hk/en/public_services/licences_and_permits/vehicle_and_driving_licences/how_to_apply_for_a_driving_licence/driving_in_hong_kong_for_overseas_driving_licence_/index.html
After that, a drive license with 1, 2 endorsement will be issued (as the U.S. licenses do not typical distinguish automatic and manual transmission).